What point are you saying is dumb? They are competing operating systems. The price difference? Microsoft doesn't think it's dumb, as they are using a similar pricing strategy this time around in hope for similar results.

They're not really competing operating systems from a business perspective. Apple's operating systems are zero- or negative-margin sales that are designed to pull people into buying a very high-margin computer. Windows, on the other hand, is a high-margin product drafting behind the momentum of millions of zero-margin PCs.

Because friction in upgrading is largely dictated by the price of upgrading?

Adoption of a $30 OS upgrade is obviously going to be quicker than a $120 OS upgrade, just as the iOS upgrades have even larger adoption.

Well, that's part of Gruber's point - he makes the connection between the low price and the fast adoption rate in the next paragraph..

40% of the Windows installed base is significantly more than three times 40% of the OSX installed base.

There are also many, many instances of Windows that are running proprietary software or which are connected to legacy systems that would never upgrade even if you paid them.